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October 25, 2022 | Bankruptcy
THE PROS AND CONS OF FILING CHAPTER 7 BANKRUPTCY IN ALABAMA
Do you feel as though you have no hope of getting out from under your mounting debt? Would you wish to STOP receiving obnoxious calls from creditors, having your wages seized, facing foreclosure, and losing the assets you have worked so hard to accumulate? If you answered “yes” to any of these questions, declaring Chapter 7 bankruptcy may be a way to improve your financial situation and give you more peace of mind.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is known as the “fresh start” bankruptcy and it provides you with the opportunity to wipe your financial slate clean and start building a solid financial future. While there are some debts that are exempt from Chapter 7 bankruptcy, such as student loans, child support, and tax obligations, it can be a viable solution for those who meet the income and debt criteria.
Large medical costs, utility bills, and credit card debt may be discharged when you file for Chapter 7 bankruptcy. Your valuable assets may be sold as part of the bankruptcy procedure, which is known as a liquidation bankruptcy. The time frame for completion can be as short as three to six months, depending on your individual financial condition.
The Pros of Filing Chapter 7 Bankruptcy in Alabama
Although declaring bankruptcy under Chapter 7 can initially appear frightening, there are some benefits to think about. You gain a powerful negotiation instrument through bankruptcy that you would not otherwise have. Creditors are aware that when you declare bankruptcy, you immediately stop making payments to them. They are more likely to cooperate with you on a payment plan that fits your budget when bankruptcy is imminent since they need to be paid.
You will also get instant protection from pay garnishments and credit collection action after you file. This makes it possible for lawyers, creditors, the court, and bankruptcy trustees to assess the assets you have available and develop a strategy for bringing the bankruptcy process to a successful conclusion.
Any assets you acquire after filing with the court are yours to keep; however, any assets you own at the time of filing for bankruptcy may be sold during the proceedings. These assets won’t be taken into account throughout the bankruptcy process.
The Cons of Filing Chapter 7 Bankruptcy in Alabama
Before choosing to file for Chapter 7 bankruptcy, you should think about its drawbacks.
Within 90 days of filing for bankruptcy, debts including credit card debt, school loans, back taxes, child support, and other obligations are not eligible to be dismissed.
After being finalized, Chapter 7 bankruptcy affects your credit for ten years. Your credit history and score will be affected less with time.
Your assets will be liquidated throughout the proceedings to assist in repaying obligations. Depending on your particular position, this could mean losing your home, car, and other valuable possessions.
Even if you might be released from debt, co-signers on these loans will still be responsible for the payments. You should consult the co-signer with whom you co-signed a loan before filing if you did.
Should I Hire an Attorney?
Although you are not required to do so in order to file for bankruptcy, your attorney will represent your interests at all times while the case is being processed. When you opt to work with a lawyer, you have a professional on your side who can assist you achieve the greatest deal while losing the least amount of assets. Because bankruptcy law is like a challenging game of chess, your lawyer will guide you through the following:
- Determine if you are eligible to file for Chapter 7 bankruptcy in Alabama
- Choose between Chapter 7 and Chapter 13 bankruptcy
- Figuring out what your debts and exemptions are in Alabama
- Prepare you for filing bankruptcy and your hearing
Why Hire Ferguson & Ferguson
If your finances feel entirely out of control or if you have experienced a divorce or large loss of income, filing for Chapter 7 bankruptcy may be a wise choice. Bankruptcy should be seen as a fresh start where you may finally regain control of your financial future, even though it may initially feel unpleasant or embarrassing. Our Decatur and Huntsville bankruptcy attorneys will help make the procedure go as smoothly as possible. Reach out to us right away so we can examine your case and assist you in starting down the path to financial freedom. Call now if we can be of assistance. Call 256-534-3435.